Good day, and thank you for standing by. Welcome to the Nanobiotix Business Update and First Half 2023 Financial Results conference call. At this time, all participants are in listen-only mode. After the speaker's presentation, there'll be a Q&A session. Please be advised that today's conference is being recorded. At this point, I'd like to turn the call over to Craig West, Senior Vice President of Investor Relations of Nanobiotix.
Thank you, operator. Good afternoon, and good morning, and welcome to the Nanobiotix conference call to discuss our first half 2023 financial and operating results. Joining me on the call today are Laurent Lévy, Co-founder and Chief Executive Officer, and Bart van Rhijn, Chief Financial Officer. As a reminder, today's call is being webcast and will be available on our website for replay. I would like to remind you that this call will include forward-looking statements, which may include statements regarding the progress, success, and timing of our ongoing and planned clinical trials, collaborations, regulatory filings, dates of presentation, and future research and development efforts, among other things. These forward-looking statements are based on current information, assumptions, and expectations that are subject to change. They are subject to significant risks and uncertainties that could cause the company's actual results to differ materially from our current expectations.
Accordingly, you are cautioned not to place undue reliance on forward-looking statements. Please review the full description of risk factors that can be found in the documents we filed with the AMF in France and SEC in the United States, including the RFS and 6-K filed yesterday, both of which are available in the investor relations section of our website, along with the press release issued yesterday, highlighting our corporate and financial results for the period. In addition, any forward-looking statements represent our views only as of today and should not be relied upon as representing our views as of any subsequent date. While we may elect to update these forward-looking statements at some point in the future, Nanobiotix undertakes no obligation to update them to reflect subsequent events or future circumstances. With that said, I'd like to turn the call over to Laurent. Please go ahead.
Thank you, Craig. I would like to welcome everyone participating via conference call and webcast today. As Craig mentioned, we issued a press release yesterday highlighting the company's first half 2023 operating activities and financial results. For today's call, I will begin with an overview of our accomplishments and review upcoming milestones for each of our programs. Bart, our Chief Financial Officer, will follow up with financial updates. I will then give closing remarks before opening the call for questions. The first half of this year has been truly transformative for Nanobiotix. Following the successful completion of a global license agreement with Janssen, the appointment of Dr. Louis Kayitalire, and an industry veteran in oncology as Chief Medical Officer, and the ongoing advancement of trials designed to establish the clinical foundation of NBTXR3 in multiple solid tumor indications.
I'm very proud of what the company has accomplished in the past months. Collectively, these achievements continue to propel late-stage development of NBTXR3 forward, expand our patient reach, and ultimately position us to realize the paradigm-changing potential of NBTXR3 worldwide. We're very excited about the recent global licensing, co-development, and commercialization agreement with Janssen Pharmaceutica, one of the Janssen Pharmaceutical Companies of Johnson & Johnson, for NBTXR3, our potential first-in-class radioenhancer. This partnership is designed to leverage the strength of both companies and accelerate and broaden the treatment potential of NBTXR3. As part of the agreement, the initial focus of clinical development will be on the head and neck and lung cancers, with expansion potential in additional solid tumor indications. We believe this partnership underscores the therapeutic and market opportunities of NBTXR3, and importantly, further validate our platform and our scientific approach.
What we find particularly attractive about this deal is that it offers both near-term and long-term value for shareholders, including access to up to $60 million in the near-term support, up to $30 million in equity, subject to certain conditions, and success-based payment of over $1.8 billion in development, regulatory, and sales milestones. Additional success-based milestone payment of up to $650 million are available for indications that may be developed by Janssen at sole discretion, and up to $220 million for indications that may be developed by Nanobiotix in alignment with Janssen. Beyond milestones, this also includes tiered double-digit sales royalties, and product manufacturing and supply. Recently, we received shareholder approval for Johnson & Johnson Innovation to become a strategic investor of Nanobiotix with an initial tranche equal to $5 million.
Bart will go through the details more in depth shortly, but we are pleased this deal has helped strengthen our balance sheet and extend our cash runway into the first quarter of 2024, including through some key clinical catalysts. We believe we selected the best possible strategic partner in Janssen, a premier oncology leader with global reach and proven experience in pharmaceutical and medical technology. At Nanobiotix, we will continue to focus on the development of NBTXR3, continue our manufacturing expertise, and serve as the innovation engine. Janssen will contribute its substantial development support, regulatory, and commercial capability. We believe Janssen regulatory and commercialization experience, combined with Nanobiotix capabilities and know-how in nanophysics, will help us to achieve our shared objectives. We are well underway getting the collaboration started, and we look forward to the potential to bring in life-changing treatment for patients around the world.
As we work to build the next chapter of Nanobiotix and advance clinical development and commercialization of NBTXR3, we are pleased to welcome industry veteran, Dr. Louis Kayitalire, to our executive leadership team at this pivotal time. Louis brings an exceptional biopharmaceutical industry track record with proven success in development, registration, and commercialization of oncology therapeutics. His seasoned, innovative leadership will be invaluable as we focus on maximizing the disruptive potential of our radioenhancer for millions of patients with cancer around the world. We look forward to working together as we prepare for registration and further optimization of our pipeline. Now let's turn to our clinical programs. As a reminder, more than 60% of all solid tumor cancer patients will receive radiation therapy during their treatment.
This presents a large opportunity for NBTXR3, which is a single treatment designed to enhance outcome alone or in combination with standard of care, and importantly, easily integrate into existing medical practice. The significant clinical evidence across multiple indications to date has shown NBTXR3 to be well tolerated, with consistent, encouraging activity in the range of solid tumors. Our ongoing clinical program evaluating NBTXR3 for the treatment of solid tumors continue to progress well, including our Nanobiotix sponsor programs in head and neck, and our MD Anderson partner program, exploring expansion opportunities in pancreatic cancer, esophageal cancer, non-small cell lung, and head and neck cancer. Importantly, we expect multiple potential value inflection points in the next 12-24 months. Our late-stage efforts for NBTXR3 are advancing, with our ongoing pivotal NANORAY-312 global randomized phase 3.
This trial evaluates radiotherapy activated NBTXR3 with and without cetuximab, compared to radiotherapy alone with and without cetuximab, in patients with locally advanced head and neck cancer that are ineligible for cisplatin chemotherapy. We remain on track to report the interim efficacy for NANORAY-312 after 67% of planned events in the second half of 2024. The futility analysis conducted following 25% of planned events is expected in the first half of 2024. For Study 102, a phase 1 dose escalation and expansion trial in patients ineligible for cisplatin chemotherapy, or intolerant to cetuximab, we expect to present safety and efficacy data at a medical meeting in the coming weeks. These data from Study 102, in a similar indication as NANORAY-312, will help to inform on our phase 3 ongoing trial.
We are also pursuing late-stage potential for radiotherapy activated plus immunotherapy combination approach, which is designed to initially prime the immune system and improve the efficacy of checkpoint inhibitors. We anticipate providing a phase 1 data update between now and the first half of 2024. For potential phase 3 registrational program in patients with recurrent or metastatic head and neck cancer that are resistant to previous anti-PD-1, PD-L1 therapy, we are in consultation with our newly appointed CMO and with our partner on what next steps should be for this program. Ongoing exploration of expansion opportunity for NBTXR3 as part of our strategic collaboration with The University of Texas MD Anderson Cancer Center, continues to be promising and includes 5 ongoing trials in advanced solid tumor.
We believe this trial can help lay the clinical foundation and provide proof of concept support for additional indications that are de-risked, with demonstrated clinical therapeutic potential for NBTXR3. In July, the first patient was injected in the newest MDA-led study, a phase 1/2 study, evaluating radiotherapy activated in combination with an anti-PD-1, anti-PD-L1 immune checkpoint inhibitor in patients with advanced solid tumor with lung or liver metastasis. We will present preliminary phase 1 dose escalation safety data at a medical conference in the coming weeks in pancreatic cancer. In addition to the planned upcoming data for pancreatic trial, MD Anderson has made significant progress in its phase 1 trial of NBTXR3 in operable non-small cell lung cancer, and expect to determine a recommended phase 2 dose for this product in the second half of this year.
As you recall, MD Anderson is also leading a phase 1 trial of NBTXR3 in combination with chemotherapy for patients with esophageal cancer, where initial data are expected in 2024. We believe these multiple value inflection points in the coming 12-24 months will further support the potential of NBTXR3 to deliver treatment benefits, and enhance the utility of standard of care, like radiation and immunotherapy, in many solid tumors. With that, I would like now to turn the call over to Bart, to briefly discuss our financial results for the period. Bart?
Thank you, Laurent. Good morning, and good afternoon, everyone. As Laurent mentioned, we're pleased that our agreement with Janssen provides Nanobiotix with substantial near and long-term value. I will start with a brief overview of the key elements of the deal. The company already received the $30 million upfront cash licensing fee and is eligible to receive $30 million in-kind regulatory and development support for Study NANORAY-312, provided at Janssen's sole discretion, and $30 million in equity in two tranches of $5 million and $25 million, that are subject to certain conditions, and in the case of the $25 million, a future qualified financing of at least $50 million in the aggregate.
We are pleased to have already received the first equity tranche of $5 million, following shareholder approval and issuance of approximately 960,000 shares for subscription by Johnson & Johnson Innovation, representing a stake of 2.65% in the company. As part of the long-term value, the company is eligible for success-based payments of up to $1.8 billion and tier double-digit royalties on net sales of NBTXR3. Additional success-based potential development and regulatory milestone payments of up to $650 million are also available in the aggregate for 5 new indications that may be developed by Janssen at its sole discretion. For indications developed by Nanobiotix, in alignment with Janssen, the company has potential to receive up to $220 million in aggregate per indication. Now, we transition to the financials.
Revenue and other income increased for the six months ended June 30, 2023, at EUR 3.3 million, compared to EUR 1.3 million for the six months ended June 30, 2022. The company has mainly benefited from the research tax credit granted by the French government to encourage companies to conduct technical and scientific research, and from the supply and collaboration agreement signed with LianBio, generating an additional EUR 1.3 million revenue for the six months ended June 30, 2023. R&D expenses consist primarily of preclinical, clinical, and manufacturing expenses related to the development of NBTXR3. These expenses for the first six months in 2023, were EUR 17.8 million, compared to EUR 16.6 million for the six months ended June 30, 2022.
Purchases, subcontracting, and other expenses increased by EUR 1.5 million for the six-month period ended June 30, 2023, as compared to the same period in 2022. This increase reflects the company's focus on advancing its clinical trial development priorities, specifically the global phase 3 registrational trial, NANORAY-312. SG&A expenses consist primarily of administrative employee-related expenses, legal and other professional fees, patent filing and maintenance fees, and insurance. The SG&A expenses for the six months ended June 30, 2023, were EUR 10.9 million, compared to EUR 9.6 million for the prior six-month period. Purchases, fees, and other expenses increased by EUR 1.1 million for the six-month period ended June 30, 2023, as compared to the same period in 2022, and mainly relates to EUR 1.4 million paid to a financial advisor.
Net loss attributable to common shareholders for the six months ended June 30, 2023, was EUR 28.1 million, or EUR 0.80 per share. This compares to net loss attributable to common shareholders of EUR 26.4 million or EUR 0.76 per share for the same period in 2022. As of June 30, 2023, Nanobiotix had EUR 21.6 million in cash and cash equivalents, compared to EUR 41.4 million as of December 31, 2022. For clarity, this cash balance does not take into account the $30 million upfront cash licensing fee, nor the $5 million cash related to the first equity tranche that the company meanwhile has received.
Based on the current operating plan and financial projections, we anticipate that the cash and cash equivalents of EUR 21.6 million as of June 30, 2023, in conjunction with the EUR 30 million upfront and EUR 5 million initial equity tranche, to result in a cash runway that extends into the first quarter of 2024, and does not take into account any potential future financing or cash inflow resulting from milestones or future collaborations. Additionally, subsequent to the company's licensing agreement executed with Janssen, the company has entered into discussions with the European Investment Bank, or EIB, aiming to remove the cash covenant from the debt financing agreement between the company and EIB.
We're pleased to inform you that these discussions have culminated in an agreement in principle on key terms that would result in the removal of the cash covenant in its entirety, in exchange for an acceleration of payment of a portion of the applicable milestone payment, calculated using an escalating single-digit percentage applied to bracketed funding amounts in the event of an equity funding event and the payment of scheduled PIK interest. Execution of the definitive amendment to the agreements between Nanobiotix and EIB is subject to finalization of necessary documentation and is expected at the beginning of the fourth quarter of 2023, which has the potential to positively influence our cash runway. Now I'll turn the call back to Laurent. Laurent?
Thank you, Bart. As you can see, we have an exciting 12-24 months ahead of us, with multiple value-creating catalysts across indication. A new chief medical officer to help execute across our clinical program, and a new partnership with Janssen that provide both near-term and long-term value, and robust developmental and commercial capabilities. Collectively, these achievements are all designed to help support successfully execution of our mission to bring NBTXR3 to as many patients as we can worldwide. In the coming weeks, we look forward to reporting final phase 1 data in head and neck cancer, and initial phase 1 dose escalation data in pancreatic cancer for NBTXR3.
During 2024, we also expect to report data from MDA-sponsored trial in esophageal cancer, and finally, in the second half of next year, we look forward to the interim results for our NANORAY-312 phase 3 trial in head and neck cancer. With that, I will now ask the operator to begin our Q&A session. Operator?
Thank you. We'll now be conducting a question and answer session. If you'd like to ask a question today, please press star one from your telephone keypad, and a confirmation tone will indicate your line is in the question queue. You may press star two if you'd like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. One moment please, while we poll for questions. Once again, it's star one. Thank you. Thank you. Our first question comes from Lucy Coddington with Jefferies. Please proceed with your questions.
Hi there. Thank you for taking my questions. Just so ahead of the pancreatic cancer data in the coming weeks, just wondering if you could kind of outline what we should be expecting from that. Is it just a safety update, or will it also include initial efficacy measures? Then secondly, in terms of the payment in kind support for 312, when can we expect that to begin from JNJ? I appreciate it, it is at their discretion, but any potential guidance on that. And then finally, in terms of the IO combination phase 3 and beyond, just whether you can give us any insight into JNJ's commitment to that. I noticed that they have authority over all regulatory matters.
Does that include the interactions regarding the phase 3, and is this still something we can expect as a near-term catalyst? Thank you.
Thank you, Lucy. So let's tackle maybe the first question about pancreatic cancer. So as you may remember, this is within the large alliance we have with MD Anderson that will encompass a number of clinical trials, and where at the moment, five are ongoing. One of these trial is a phase one that include escalation and expansion part on pancreatic cancer patient. So what we should expect in the next few weeks is about the data coming from the escalation and the first patients coming from the expansion. And this will be about safety and feasibility, of course, as you mentioned, but we will also start looking at the first line of efficacy.
Just as a reminder, in this first part of the clinical trial, we've been treating locally advanced pancreatic cancer patients. So the ones that have a tumor that is not operable, and usually what you try to do with this patient is to give them some induction chemo, followed sometime by radiation plus chemo. And unfortunately, because of the type of the disease, then those patients, they have a very short life expectancy and not many of them will respond to the treatment. So I think what will be very important to look at here, outside safety and feasibility, is also what is the first thing we can see in terms of disease control rate, in terms of survival, what starts emerging from this trial?
Of course, as I mentioned, the expansion part is ongoing, so we'll be happy to continue to communicate on this trial. So I think that's for the question one. The second question, if I remember, well, Lucy, was about the contribution in kind from JNJ in the 312 trial, which is our ongoing global phase 3 on locally advanced head and neck cancer patients that are too far to receive cisplatin. So here, by contract, as you've mentioned, there's a $30 million in kind for this specific program.
So we've been initiating this contract in July, it became effective in August, and since then we've been working a lot with the Johnson & Johnson team to start putting everything into motion, and that includes the 312 and the potential help they will bring in helping us across different countries. So we are finalizing the plan as we speak. So we have no specific to deliver to the market for now, but be reassured that we are pretty active in that aspect of the program. And I think the final question was about the IO program, where it is moving and where shall we expect some update here.
Just for the crowd around the table, to remind that our product not only could have a local effect in combination with radiation therapy, but we've been showing also through multiple animal model and also in the first part of the clinical trial, we've been showing that this product prime an immune response. And the overall goal of combining radiation, nano, and immunotherapies is to try to see if we can get much more patient with metastatic stage disease to respond to checkpoint inhibitors in a better way. So, what do we expect in this program?
First of all, our expansion phase is progressing really well, and we expect to give substantial update within the next nine months, and that will inform us more about the certainties of the magnitude of the effect we already observed in the escalation part. So we'll be happy to provide that as soon as possible through one of the medical conferences. As far as the phase 3 is concerned, when we talk about our potential phase 3 in refractory head and neck patients, and which is something we've been discussing with FDA, of course, and since we've been signing this collaboration with J&J, now we're reviewing what's best for the product to move forward. So as a standalone company, the head and neck refractory patient population was and is a good choice.
Now that we have a much bigger partner, there may be something much more powerful and interesting to do within the IO field. So it doesn't mean that we won't go for this population in head and neck, but at the moment, we are discussing this plan, and we will come back to you as soon as possible on this.
Thank you very much.
I hope it answers your question.
Our next question comes from the line of Swayampakula Ramakanth with H.C. Wainwright. Please proceed with your questions.
Thank you. Good morning, Laurent. On the data, we are expecting some final data from Study 102 in the coming weeks, you said. I'm just trying to see what sort of a read-through can we get from that to the NANORAY-312?
Thanks, Rakin. So as yes, you mentioned, and we did mention in the PR, again, in the coming few weeks, where we're gonna have an update on the 102 data, which will be about the final readout of this trial. I think this readout is very important because that's the last one we have on the primary endpoint of this trial. That should and could inform us on the potential success of the 312 or ongoing phase 3 trial. I think what we should look at carefully here, of course, safety is always a must-have in such a population, which is frail, elderly, and that can't receive many treatment. But on the top of that is the final readout of the efficacy.
That will include the rate of response, the complete response, the duration of response, which is critical, and also the PFS and the OS, when the data have matured. You may remember that we have been giving to the market some information, ongoing basis with this trial, but the data were not that mature, and now we have the full set of data with a long-term follow-up for patients, so we'll get that very, very soon. So just to put that into perspective versus the ongoing phase 3 trial. You may remember that in the phase 1, we have a very frail population with very high comorbidities. And in this population, we have injected the primary tumor and irradiated the primary tumor and have been looking at the impact of this for the patient.
When I talk about the primary tumor, is that a good number of those patients also have lymph node invasion, and for this lymph node, we just have given a radiation therapy dose, no, no NBTXR3. So that's a difference, which is fundamental or could be very important with the ongoing phase 3, where we inject not only the primary, but also potentially some of the lymph node that are surrounding. So but what it does tell us is, when you look at the data from the 1 or 2, we may expect additional efficacy in, in the 312 also. But let's see, and let's wait, when the data are coming and have a full review on, on what it means for patients and what is the, the impact we could expect for, for the 312.
Thank you for that. One more thing. On the non-small cell lung cancer data that MD Anderson is going to release, is your partner, Janssen, going to wait for that data before they decide on their study in terms of design and whatnot, or are these two independent events?
Thanks. Thanks for the question, and I think that's an important precision, so thanks for asking. These are two independent pathways, right? At MD Anderson, we are treating here a very specific population in non-small cell lung cancer. We're talking about patients that already received radiation for the local treatment of the disease and have a local relapse. So here we try to inject the product post-relapse and try to make a reirradiation with a smaller dose of radiation in a pre-irradiated area. So the good thing is that we did not hear about this trial in that term, so it means that so far the safety is good, and that's a very good surrogate to see that we can inject in lung, even in very specific and hard condition of the pre-irradiated tissue.
So that's the MD Anderson pathway, and we expect to conclude the RP2D very soon and to be able to communicate the first data after that. As far as the JNJ lung cancer program is concerned, here we'll talk more about naive patients, pretreated with no pretreatment, sorry. As we mentioned in our PR, we're looking at stage 3 lung cancer patients, so the scheme of treatment and the patients are different. So at maximum, we could get inspired by the safety of what we see at MD Anderson, but the program itself will be started and will be launched separately.
Thank you. Thank you, Laurent, for taking all the questions.
You're welcome.
Thank you. As a reminder, you may press star one to ask a question. Our next question is from the line of Clemence Thiers with CFIL. Please proceed with your question.
Yes, hello. I had a question. Can you hear me?
Yes, Clemence.
Oh, yeah. Sorry. I had a question regarding Hensify in soft tissue sarcoma. Was it discussed with J&J? Do they plan to launch it after the launch of the first product in head and neck? The second question was regarding LianBio and their commitment to five registrational trials. Have they mentioned any interest beyond the LA head and neck program? Thank you.
Thanks, Clemence. So let's start maybe with the soft tissue sarcoma. As you may know, around the table, we already have had a positive phase 3 randomized trial in soft tissue sarcoma patients that led us to get an approval on the European market. So obviously, that has been part of the extensive due diligence that J&J have been doing on the product and part of the discussion we have. As soon as we're going to start, like, operations and discussion around the commercial aspect of the product and how we're going to do it, in which order, starting in which country, then this will come back, obviously, on the table. But for now, we have no specifics, sorry, to give on this aspect.
But we promise we'll keep you posted on what's going to happen for this product in this underserved population. For the second question about LianBio, you're right to mention that in the contract we've been signing with them, there is a commitment from them to be at least participating to five registrational trial in the context. And they do participate to the ongoing phase 3 in head and neck cancer, where they have a commitment to recruit 20% of the patient out of the 500 we have, and the recruitment there is progressing well. Now, for other indication, especially because the arrival of J&J in the game, and now we have two other partner with Nanobiotix developing this product. So we are currently discussing beyond what is on the table and see what will be the next steps.
But we have ongoing discussions, specifically with LianBio also, to think about different options and different therapeutic activities we could benefit from in specific population that exist in Asia. I will not mention which cancer, but there are many that will be a specific problem of this part of the globe that we're trying to tackle.
All right. Thank you very much.
You're welcome, Clemence.
Thank you. There are no further questions. I'll now turn the call over to Dr. Lévy for his closing remarks.
Thank you very much for participating to this call. I see there are more people than usual. We are happy about that. We'll be very happy to communicate very soon with you about the next set of data that are coming. So pancreatic cancer and head and neck phase 1 final data. And I think we'll take this occasion to look about how the future is coming and also what will be the potential outcome of the phase 3 based on all this. So again, happy to have you all on board. Thank you for your help, and let's talk soon.
Ladies and gentlemen, this concludes today's presentation. Thank you once again for your participation. You may now disconnect.